Sec 40A(3)

The latest amendment talks only about it changed from Single Payment to Aggregate payment in a day... PLS refer Para 49.2 Vinod k singaniya

 i don have that book as of now friend...But did u read thru a few examples and threads i posted...and my TN Manoharan books example also says that as i have said..and now the lawyers club post too...tats wats is confusing me

40A(3)

WEF 01-04-2008

Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure

The emphasis is on the total payment to a party exceeding Rs.20,000/-, not the expenditure amount.

Before 01-04-2008

Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft, no deduction shall be allowed in respect of such expenditure.

The emphasis one payment to the party exceeding Rs.20,000/-.

The words “a sum” were used.

In this situation, some decisions were made in favour of assessee, the summary of which is provided here.

Limit applies to payment to a party at one time - The statutory limit of Rs. 10,000 (now Rs. 20,000) applies to payment made to a party at one time and not to the aggregate of the payments made to a party in the course of the day as recorded in the cash book. The word ‘sum’ in section 40A(3) is used only to indicate an amount of money and does not refer to the totality of the expend­iture. - CIT v. Aloo Supply Co. [1980] 121 ITR 680 (Ori.).

Limit applies to each transaction - The words used are ‘in a sum’, i.e., single sum. Therefore, irrespective of any number of transactions, where the amount does not exceed the above amount in each transaction, the rigours of section 40A(3) will not apply - CIT v. Triveniprasad Pannalal [1997] 94 Taxman 381 (MP)./CIT v. Kothari Sanitation & Tiles (P.) Ltd. [2006] 282 ITR 117 (Mad.).

In this situation, the assessee could split his payments and say that the expense could not be disallowed.

But after the amendment, there is no scope to say that you can split the invoices and prevent disallowance U/s 40A(3)

Meaning of “Any”

Please do not interpret the word “any expenditure” as “the expenditure”

I am giving below accepted meanings of the word ‘ANY’ and ‘EVERY’

ANY

1. The word ‘any’ means ‘one or same or all’. Lucknow Development Authority v. M.K.Gupta, AIR 1994 SC 787, 793. [Consumer Protection Act (section 68 of 1986), S.2(10)]

SOURCE: LAW LEXICON BY P. RAMANATHA AIYAR, WADHWA AND COMPANY NAGPUR, 2^nd EDITION

2. Word ‘any’ has a diversity of meaning and may be employed to indicate ‘all’ or ‘every’ as well as ‘some’ or ‘one’ and its meaning in a given statute depends upon the context and the subject matter of the statute. Donohue v. Zoning Bd. Of Appeals of town of Norwalk, 155 Conn. 550, 235 A.2d 643, 646, 64. It is often synonymous with ‘either’, ‘every’ or ‘all’.

SOURCE: BLACK’S LAW DICTIONARY, WEST PUBLISHING CO., 6^TH EDITION, relied on in various SC decisions

3. The word ‘any’  according to the dictionary meaning indicates ‘all’ or ‘every’ as well as ‘some’ or ‘one’, depending on the context and the subject matter of the statute. Balaganesan Metals v. M. N. Shanmugham Chetty, (1987) 2 SCC 707; AIR 1987 SC 1668 [T. N. Buildings (Lease and Rent Control) Act, 1960, S.10(3)(c)]

SOURCE: SUPREME COURT ON WORDS AND PHRASES, SURENDRA MALIK, EASTERN BOOK COMPANY 1993.

EVERY

Each one of all; all the separate individuals who constitute the whole, regarded one by one. The term is sometimes equivalent to “all”; and sometimes to “each”.

SOURCE: BLACK’S LAW DICTIONARY, WEST PUBLISHING CO., 6TH EDITION, relied on in various SC decisions

Going by the intention with whic 40A(3) is amended, i.e., to prevent black money from circulating, it is only proper that all expenditures must be counted as the same. Hence I would disallow the both the expenses since the payment to the party exceeds Rs.20,000/-.

disallowed. i agree with G.K

I Think it will be allowed.

because the wording is:  Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments................... no deduction shall be allowed in respect of such expenditure

 the word is any expenditure and not Expenditures.

and in last its such expenditure and not Such expenditure or Expenditures.

so payment in respect of one expenditure will be disallowed if exceeds 20000. if payment is in respect of two expenditure then allowed. you should notice again the highlighted words

 But shashi cant it be like if any such expenditure or expenditures cumulatively accounts for more than 20000 then such each such expenditures will be disallowed..It doesnt say such expenditure shd individually account for tat 20000

 https://www.bcasonline.org/ContentType/Contentlist.asp?currentPage=19,

Please read the case law in that regard in that page...i wud love to have the details of that case anyway